Kevin Andrews talks about proposed welfare changes

Minister for Social Services, Kevin Andrews, talks to Sarah Ferguson about proposed changes to the welfare system which could, potentially, affect hundreds of thousands of people.

Transcript

SARAH FERGUSON, PRESENTER: Australia's $100 billion welfare system is facing its most significant overhaul in 15 years.

In its first interim report, the Government's McClure Review has recommended streamlining payments and moving thousands of people from so-called "set and forget" payments towards work.

For the 830,000 people on the Disability Support Pension, it proposes only those people with a permanent disability should continue to receive the payment.

It also proposes extending trials of income management in disadvantaged communities.

Driving the reform is the Minister for Social Services, Kevin Andrews. I spoke to him earlier.

Kevin Andrews, welcome to 7.30.

KEVIN ANDREWS, MINISTER FOR SOCIAL SERVICES: Thank you very much.

SARAH FERGUSON: Now, some of the coverage of the proposed reforms describes it as an attack on rorters. Is that how you see it?

KEVIN ANDREWS: This is not a review of welfare fraud. People by definition on welfare have qualified. What this is really about is our propensity in the past to have set-and-forget payment likes the DSP rather than encouraging people where they're capable of participating.

SARAH FERGUSON: Alright, let me come to that in a moment. But I do recall just before the Budget you talking about, in relation to youth unemployment, young people needing to get off the couch. If you want to introduce genuine reform, don't you need to change that sort of language?

KEVIN ANDREWS: Look, there are some young people who sit on the couch. We know that. But there are also a lot of young people who actually want the opportunity to get the training and to get into work.

SARAH FERGUSON: So you agree we should stop that kind of language?

KEVIN ANDREWS: Look, I think this is not about language to try and make people feel worse or anything like that. It's really about a system that's been the product of ad hoc decision over decades that in fact in a lot of cases doesn't encourage participation and that's what I'm really on about.

SARAH FERGUSON: Alright. Well let's talk about one of the biggest moves that's being mooted here is the - to do with the more than 800,000 people on the Disability Support Pension. The largest proportion of those people have mental illness and you're suggesting that those with an episodic mental illness could be moved towards work. Now how are you actually going to define who's capable of making that move?

KEVIN ANDREWS: Well, there are a number of ways you could do that, but let me make the point: there are some people with mental illness who are incapable of working and they should continue to receive disability pensions. But there are some people who've got a mental illness, which as you say, is episodic. So, what our challenge is as to how we can enable them to use the capacity they've got, the episodic capacity to work. How do you define it? You could maybe define it by the type of illness, you could define it by the number of hours they're capable of working, but we don't have a final position on that and that's why we've got this review in place. Give us that advice, engage the community in that conversation and discussion.

SARAH FERGUSON: Do you know how many recipients on the DSP are there for impairment due to drug and alcohol issues?

KEVIN ANDREWS: I don't know exactly the number 'cause it's very difficult to measure that and some of the mental illness is due to drug and alcohol problems. We know that the largest proportion of people now going on to the DST are because of psychiatric or psychologically-related illnesses. So, there is certainly a significant number of people.

SARAH FERGUSON: So do we have enough services to deal with those people, people who are on the DST for drug and alcohol?

KEVIN ANDREWS: Look, governments of both political hues have put more money into mental illness. There's been a range of programs. Is it enough? Probably no.

SARAH FERGUSON: Alright. Let's talk about the move to work. Do we have sufficient employment services to get people off the DSP, particularly those - that very large group of people there for mental illness reasons, to get them off the DSP and into work?

KEVIN ANDREWS: There's a review of the job support network going on at the present time and a review and changes in the disability services network as well. That's going to be aimed at: how do we actually get people into work rather than just churning them through training programs?

SARAH FERGUSON: Now isn't that a little bit the case at the moment, that not all of those services are actually getting people into work, they're getting paid, they're getting - actually given incentives just to deal with people rather than find them jobs?

KEVIN ANDREWS: That's true and there's been a propensity for some providers at least - and maybe that's the incentive in the system - to churn people through programs of training, rather than actually getting an outcome and the outcome here is a job. So, the new job services contracts, which come up next year, that will be much more focused on the outcome, namely a job.

SARAH FERGUSON: Isn't that going to require investment from the Government to improve those services significantly to deal with that very large number of people?

KEVIN ANDREWS: These sorts of things require some investment. I mean, when I was the Employment Minister and we did a wave of welfare reform then, we expended some $3 to $4 billion on it. So, you've got to make some upfront investment to have the long-term payoff.

SARAH FERGUSON: So what sort of figures are you thinking about? If that was $3 to $4 billion - did you say $3 to $4?

KEVIN ANDREWS: Yes.

SARAH FERGUSON: Then what are you thinking about here?

KEVIN ANDREWS: I haven't got to that stage. This is a phased process. McClure will come back with an architecture, if you like, but then we have to make sure it works. So, this is a phased process.

SARAH FERGUSON: To be realistic, it's going to be expensive to put those services in place.

KEVIN ANDREWS: This is about taking a longer-term investment. For far too long governments have taken the view that what you look at is what's going to happen over the next three or four years. If you look across the Tasman to New Zealand, they take a 10, 15, 20-year view of this by looking at what social investment you need upfront which will get that long-term return.

SARAH FERGUSON: Have you put any constraints on the McClure report in what it comes back with in terms of cost?

KEVIN ANDREWS: No, and McClure is not looking at cost. I think that was the point that Mr McClure was trying to make today. He's going to come back with an architecture with some proposals for restructuring the system. He doesn't have the ability to go out and do all the modelling that's involved, so there'll be a further phase where the Government will have to look at those costs of what's being proposed.

SARAH FERGUSON: More generally in relation to employment, that is, the drive to get people off welfare and into employment, throughout the report, the language is all about the crucial importance of job-ready skills of literacy and numeracy. But industry groups have been very critical of you and the Government for cutting some of those programs that provide those skills. So how do you justify that when employment is the key to reducing the future costs of welfare?

KEVIN ANDREWS: Well we've got to get the balance right there, Sarah, and we've cut some programs because we had to tighten the belt this some areas, but by the same token, the new jobs employment services contract will be much more aimed at getting the real outcomes which are employment ...

SARAH FERGUSON: But the Australian Industry Group was particularly critical of you for cutting a literacy and numeracy program that's been around for a very long time, it's very successful. You've cut that. Isn't that exactly the skill that these people are going to need?

KEVIN ANDREWS: That's one of the programs, and yes, we had to cut some things and we regret we've had had to cut some things because of the state of budget, but we've had to that ...

SARAH FERGUSON: But doesn't that reduce your capacity to make this sorts of reform work?

KEVIN ANDREWS: No, because we're investing in a whole lot of other things in that regard. But we fully accept that what you do upfront, whether you're talking about a child before he or she goes to school or whether they can read or write at the end of primary school or whether they've got the range of soft skills even at the end of secondary school, those are all important things, and that's why I'm so interested in what I call this social investment approach.

SARAH FERGUSON: But at the same time, if business is telling that you those are the wrong programs to cut, will you listen to them?

KEVIN ANDREWS: We're listening to business and one of the pillars the Patrick McClure has put through is engagement with business and employers.

SARAH FERGUSON: Just briefly, on the issue of income management, that also gets a lot of attention in the report. I know there's some anecdotal evidence about it. Is there any real evidence and the proper, empirical evidence that supports the idea that income management drives long-term change?

KEVIN ANDREWS: Well some of the surveys which my department have been engaged in suggest that - certainly the anecdotal evidence is, wherever I go - if you go to an Indigenous community, the women in particular will come up to you and say, "This has been a great thing."

SARAH FERGUSON: Yes, indeed, and that's the anecdotal evidence, but is there any proper evidence that supports this?

KEVIN ANDREWS: Well we're doing the trials in the non-Indigenous communities at the moment, in Shepparton, in Logan, in Playford, in various parts of Australia and we're going to roll out some further income management in Ceduna in South Australia, but we haven't funded it beyond 12 months because we want to wait and see what this outcome of this review process is.

SARAH FERGUSON: The interim report into institutional responses to child abuse came out today. The Royal commission has asked for a two-year extension and a further $104 million to continue with their inquiries. Will your government support that?

KEVIN ANDREWS: I suspect the Government will, but I don't want to foreshadow a final position on that. That's a matter for the Attorney to bring forward to the cabinet.

SARAH FERGUSON: Thank you very much indeed for joining us, Kevin Andrews.